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socrateaser
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 38802
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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About 5 years ago my girlfreind had a judgement put against

Customer Question

About 5 years ago my girlfreind had a judgement put against her at the magistrate level,from a debt collector attorney that froze her bank account. She had just recieved a tax refund of over $4000.00 which was held up. The debt coolection law firm never actually took the money out. About 6-12 monthes later the law firm went out of business due to many lawsuits against them for such practice. After all this time her money is still in limbo at the bank. The bank keeps saying they cannot release it because of the order. What must be done to get the money released?
Submitted: 4 years ago.
Category: Bankruptcy Law
Expert:  WALLSTREETESQ replied 4 years ago.

WALLSTREETESQ :

Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarificati on.

WALLSTREETESQ :

If their was a judgment against her, the account would still be frozen, unless she can obtain a settlement letter from the original creditor releasing the funds or from the Court, the bank is not authorized to release the funds.

WALLSTREETESQ :

If she files a bankruptcy the funds will have to be released, and that would her best and fastest option.

WALLSTREETESQ :

Another option is to go directly to the bank and advise them that the funds taken were a tax refund, and law prohibits them from being taken to satisfy a State judgment.

WALLSTREETESQ :

. Tax refunds can only be garnished for three things: money owed to the government, child support, and student loans. No one except the government can garnish tax refunds for anything except a student loan.

Customer: replied 4 years ago.
i see no response
Expert:  WALLSTREETESQ replied 4 years ago.
WALLSTREETESQ : Hello I am a licensed attorney here to help you with your question, please review my response and do not hesitate to ask for clarificati on.
WALLSTREETESQ : If their was a judgment against her, the account would still be frozen, unless she can obtain a settlement letter from the original creditor releasing the funds or from the Court, the bank is not authorized to release the funds.
WALLSTREETESQ : If she files a bankruptcy the funds will have to be released, and that would her best and fastest option.
WALLSTREETESQ : Another option is to go directly to the bank and advise them that the funds taken were a tax refund, and law prohibits them from being taken to satisfy a State judgment.
WALLSTREETESQ : . Tax refunds can only be garnished for three things: money owed to the government, child support, and student loans. No one except the government can garnish tax refunds for anything except a student loan.
Customer: replied 4 years ago.
wouldn't going to the bank be easier than filing for bankruptcy? She doesnt want to file for bankruptcy because its been over 8 years since he credit cards were left unpaid. Also. Her father is on that account as well. But he has no credit issues. He was just on it as a user.
Expert:  WALLSTREETESQ replied 4 years ago.
She can go to the bank and advise them that the funds taken were federal tax refunds, however their is no guarantee that the bank will release the funds, many times they take time but that should be the first option
Customer: replied 4 years ago.
Can you provide me with the law that staes what you said about them not being able to hold funds from a tax return?
Expert:  WALLSTREETESQ replied 4 years ago.

http://business.ftc.gov/documents/fair-debt-collection-practices-act THE FAIR DEBT COLLECTION PRACTICES ACT ABOVE.

 

Be aware if the account was garnished prior to the deposit, the tax refund would be part of the garnishment and lose protection, the law prohibits garnishment of tax refunds, unless directly made into a bank account, where the account is frozen.

Customer: replied 4 years ago.
it was garnished right before the deposit. Because we were trying to get it switched to just recieve a check, but it was to late. It was a direct deposit from the goverment into her account for the tax refund. The company is now out of business. The money just sits there.
Customer: replied 4 years ago.
hello?
Customer: replied 4 years ago.
Relist: Incomplete answer.
Customer: replied 4 years ago.
Relist: Incomplete answer.
Expert:  socrateaser replied 4 years ago.
Hello,

Different contributor here. Please permit me to assist.

The solution to the problem is to file a "Debtor's Motion to Quash Garnishment and Compel Satisfaction of Judgment" in the court from which the garnishment was issued, and under the garnishment case number.

Unfortunately, there is no standardized form with which a debtor can just "fill in the blanks" to accomplish this goal. Ordinarily, I would probably tell you that the cost of hiring a lawyer to bring this matter to court would probably be more than the value of the garnishment. However, it could be that by filing the motion and serving the judgment creditor at the last-known address provided to the court would be sufficient notice such that you could simply appear unopposed in court, testify to the fact that the attempts at service of the motion have been returned unopened, and so the court should release the money, because apparently the creditor has abandoned its case.

Assuming that a lawyer was willing to take a chance you may be able to get someone to take the case on contingency for one third of the amount garnished. So, it would cost you some dough to get the money -- but, 2/3rds of something, is better the 100% of nothing.

For a civil litigation attorney referral, see this link.

Hope this helps.
Customer: replied 4 years ago.
That was my thought. I told her i'd rather pay a lawer $1000, and get $2000, rather than have none. So i just write the debtor and ask they release the money. And when i get it returned, i then petition the courts and show the returned letter? What about what the other attorny said about going to the bank?
Customer: replied 4 years ago.
??
Expert:  socrateaser replied 4 years ago.
I think you mean "write the creditor" -- not the debtor.

No, you must file and serve a motion to quash and to compel satisfaction of judgment. The service of the motion on the creditor at the address found in the court file will prove that the creditor has abandoned its claim by failing to maintain a current address with the court.

Sending a letter to the creditor and having it returned is an unnecessary step, from a legal viewpoint, because you will have to serve the notice of motion, at the same address, regardless. However, if you just want to see if you can get a response, before you start spending money on a lawyer, then mailing the letter and having it returned would be a good means of accomplishing that goal.

Hope this helps.
Customer: replied 4 years ago.
Do i file at the county courthouse, or at the magistrate? Which is who made the judgment.
Customer: replied 4 years ago.
the judgment was also for 3165.00. It still shows she has 3660.00 in her account, and they freezing all of it. Plus charged her $100 fee for putting a hold on it.
Expert:  socrateaser replied 4 years ago.
You file with the court that issued the writ of garnishment/execution -- not where the judgment was entered, unless it was the same court.
Customer: replied 4 years ago.
ok. The company that did this was LVNV Funding. I am reading online that they were fakes, buying old debts and suing people. Coming to court with bogus affidavits. Nothing but bad things about them.
Expert:  socrateaser replied 4 years ago.
Well, if the debt was fake, then you could conceivably file a motion to set aside the original judgment. Which would automatically void the writ of execution/garnishment. But, getting a set aside is no less difficult than quashing the writ. So, you will still need a lawyer to plead your case.

Note: I have a family get together to attend. If you have further questions, feel free to ask, and I will answer this evening.

Hope this helps.
Customer: replied 4 years ago.
thank you
Expert:  socrateaser replied 4 years ago.

You're welcome.

Note: if you have no other questions on this subject, then I would greatly appreciate a positive rating, so that I can receive compensation for my answer.

Best wishes.

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